Showing posts from September, 2012

Election And Controlling Debt

After the election we will be in a position to release  the power of the "confidence fairy". There is allot of cash on the sidelines because Americans do not believe our elected officials have the determination to come up with a long term plan to gain control of out debt. This should be a high priority of the second Obama Administration. I don't know whether the plan put forth by Simpson-Bowles is on solid footing, but it is a start and we should use it as a template. We should also take the opportunity to tweak the Affordable Care Act to make the health insurance and health care industries more free market oriented. These industries should never be totally void of regulation because the nature of these markets do not permit them to be totally free.  I am in favor of focusing on job creation; however it will be easier to accomplish if the nation is comfortable that we are controlling our debt rather then the debt controlling us. In 1933 the total U.S. debt, gov

Forgiving Mortgage That Is Not Debt

If you were a bank and under pressure by regulators to reduce debt owed you by mortgagors coming from the collapse of the housing market in 2008 what would you do? A good strategy would be to "officially" forgive the debt that you have already written off or know is highly unlikely to be repaid. In this manner you comply with an agreement entered into with the government requiring you to provide retribution for partially causing the calamity in the first place. This is exactly what is being done by JP Morgan Chase and Bank of America. ¹ They are notifying borrowers who have completed bankruptcy, or the bank has already provided for a loss reserve, that their debt is forgiven. The banks are getting credit towards the $25 billion they agreed to pay back in February as retribution for contributing to the mortgage meltdown of 2008. ²  Further, the government is getting credit for coming down on the banks. These losses should be already recognized on the banks books; therefore

Romney's Investments in China

This is the kind of thing that causes one to think Romney is not fit to be President. I am not questioning whether an American has a right to invest in China. I am not questioning whether it is morally wrong for an American to invest in China. In fact, I don't see anything wrong with it from a moral, ethical or legal standpoint. What I find disturbing is someone who has been "running for President" for the last eight years does not have the common sense to know that it will be a problem with many voters. It has nothing to do with right or wrong. It has to do with good judgement. He really lacks good judgement from tying his dog to the roof of his car to investing in China. This is why it is important that he release at least three more years of taxes. Mitt Romney has poor judgement. When someone applies for a commercial real estate loan they are required to provide three years of tax returns and financial statements. If they don't provide the tax returns, they do

Oligopolies Income Disparity & jobs

The principal federal statutory provision governing mergers is Section 7 of the Clayton Act, which provides: No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or tend to create a monopoly. There are more consequences to oligopolies gaining control over industries than a rise in prices to the consumer. These include less innovation and reduction of quality, fewer jobs, wider income disparity, and greater concentration of political power. This is all caused by the erosion of free markets. The ec

Erosion of Western Power

If you want a better grasp of the future of the world you need to listen to an interview on the talk show On Point with Pankaj Mishra , Indian essayist and novelist. His latest book is “ From the Ruins of Empire: The Intellectuals Who Remade Asia .” The book suggest that power is shifting away from western culture. Below are bullet points worth noting. The author is from India and therefore has a different perspective than westerners. It is worth understanding their view of history and the future. The East was looking for dignity and equality from the West and never got it. When Japan's navy defeated Russia's Navy in 1905 the East began to believe in themselves and it gave them hope that the imperialism of the west could be overcome. This hope spread throughout the East; not just Japan. A crystallizing moment regarding China was when in 2009 the Premier of China stood at the tomb of Mao Tse Tung's son and said that he can rest for eternity because China is strong an

Romney's Contributors

For an updated list go to Mitt Romney . Here is the same report on Barack Obama

Obama's Edge Over Romney

Romney will have a tough time overcoming the lack of trust that the electorate has of him. Yes, the country should have done better than it did these past four years and Obama shares the blame; but let's recognize for much of that time he was dealing with a congress focused more on regaining the White House than addressing the issues facing the country. Mitt Romney, has demonstrated he is a short term thinker ignoring the long term consequences of what he is saying. He is focused more on what he needs to do today to get more votes than on what impact his proposals have on the long term future of our nation. In his career he has been focused on one deal at a time and saying what is needed to get the deal done. He has not grasped the idea that what he says in Florida will be heard by the remainder of the world the next day or month. Mr. Romney gives the impression that he is more concerned about getting elected than he is about what he must do after he is elected. Perhaps we mad

Cause of Mortgage Crisis.

There still is confusion over what and who caused the mortgage crisis. Wall Street firms created mortgage backed securities, backed by first mortgage loans, that were not backed by any agency of the federal government and now referred to as sub-prime loans. They then went to the rating agencies, S&P and Moody's, and paid them a fee to get a AAA rating, the highest investment grade. Wall Street sold them to investors, pension funds, banks, insurance companies all over the world. Fannie Mae and Freddie Mac also created mortgage backed securities starting in the early 1970's. These securities did have the full faith and credit of the United States. These securities worked fine until the market was flooded with sub prime loans, which in turn drove down the value of homes as borrowers using these sub prime loans defaulted. Home prices were driven down so far that the securities insured by Fannie and Freddie started going under water. It is true that some time in the mid ninetie

Romney: Best Little Whorehouse

Romney reminds me of the politician in that great movie, "The Best Little Whorehouse in Texas.

Cuban Embargo and China

Regarding our embargo of trade with Cuba,  "In a separate local television interview, Mr. Ryan also explained how he had come to change his mind and since 2007 has supported the embargo.", Ryan Criticizes Obama’s Cuba Policy and Explains His Shift on the Issue , New York Times, September 22, 2012 Sometimes we conduct our foreign policy like it is still 1980. I understand the current Obama administration also supports the continued enforcement of the embargo. Both Mr. Obama and Mr. Ryan are wrong. Who have we hurt with such a policy? Certainly not the Castro's. We hurt the ordinary citizen of Cuba who are not enemies. Further, at the same time we are increasing the presence of the United States in the Pacific rim much to the dismay of China. If I was in a leadership position in China I would quietly tell the President that I am not happy with the United States flexing its muscles so close to China's borders and, oh by the way, we have decided to increase trade

Romney: Business is Business

How can Mitt Romney, who is religious and a devout family man, justify saying things that are in conflict with other statements made in his recent past? I had a business client that Mitt Romney gives me cause to remember. He was a real estate investor and a shrewd negotiator who would look for an opportunity to renege on an agreement, whether verbal or in writing, in order to pay a little less or make a little more on a transaction. I saw him do this on a number of transactions and in fact he tried to do it with me by attempting to have me accept a lower fee than what was agreed too. I did get paid as agreed, but it was a struggle. At the same time he was very religious and a devout family man. Every time we drove up to a property near Flint, Michigan, to make an inspection, we would go past a large picture of Jesus and he would start praying and kissing the crucifix on the rosary that he had

Bailouts The 1% and The 47%

As a result of comments made by Mr. Romney that was recorded and posted on You Tube by Mother Jones, there is much discussion about the 47% of Americans not paying federal income taxes. Much of the talk comes from conservatives stating that this is unfair. I find it interesting that these conservatives are saying nothing about the near trillion dollars spent by our government for the bail out of banks, hedge funds and other corporations resulting from the market collapse in 2008. What makes it more bizarre is that many of these institutions contributed to the market collapse by profiting from the sub prime housing fiasco throughout much of the last decade. It seems to me that what is most unfair is that none of these institutions have had to pay much of anything in the form of retribution for all the financial carnage that they have caused. Goldman Sachs is a good example of this. Read More

With Romney The Decision is Simple

It is simple. Romney is not qualified to be President. He is not someone that you can trust. He is not a bad, evil guy. It is just that in his adult life he flourished as a dealmaker doing and saying whatever was necessary to make the deal. Afterwards  he moved on to the next deal negotiating with someone new. In the new transaction he was able to make new and different promises because his opponent had no prior dealings with him. In Massachusetts he came across as a liberal to get elected. In this year's primary he portrayed himself as a right wing conservative. During the Presidential campaign in public he shifted closer to the center while in private meetings, with wealthy donors, he became the right winger again. This is not someone who we want as President. It is not someone who foreign leaders, except for Mr. Netanyahu, want to deal with. Too much is at stake. Read More

Mother Jones Got A Thing Going On

Mother Jones does it again. Romney says there may be no solution in the Middle East.

We The People

Here is what I hope we can agree on. 1. We need to get our fiscal house in order. We cannot keep running deficits. 2. At our core is the Judeo/Christian belief that we should help our neighbor. This includes helping him to help himself. 3. All men, and women, are created equal. 4. We still believe in freedom of religion. 5. Government derives its power from the consent of all the governed and not just those controlling the wealth. Until the 275-million plus of us sitting on the sidelines and not demanding our rights take action, nothing will change for the better. It is up to us, the people. OUR LEADER IS US!

Romney on Hidden Camera

Mitt Romney said, "There are 47 percent of the people who will vote for the President no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what...These are people who pay no income tax ... "My job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives." Mitt Romney Per Annie Lowrey of the New York Times, The Reasons Behind 'The People Who Pay no Income Tax',  September 17, 2012 "It (The Tax Policy Center) found that about half of the households that do not pay federal income tax do not pay it because they are simply

Middle East Turmoil

What is going on in the Middle East is an abomination. Americans are at risk and are being unjustly held accountable for historical events they had nothing to do with. Our government must take all measures necessary to protect them from harm The current turmoil in the Middle East is about decades of actions on the part of the United States and its allies. It is about the decision to create a homeland for Jews in the Middle East by unilaterally removing the prior residents of the land, who were mostly Muslim, and creating the new nation called Israel. The resentment towards us grew further as a result of much of  our actions since then. Our country has been supporting dictators in order to have easy access to oil. While we propped up dictators in Iran, Egypt, Saudi Arabia and other countries, the populous in these countries were held in poverty and we did little to correct it. This is why they are angry. Frankly, they have good reason to be angry for our actions of the past. That

Federal Reserve Quantitative Easing

I support the Fed's actions to buy large quantities of mortgage bonds, and potentially other assets, until the job market improves substantially. However, there will be consequences in the long term. When buying short-term treasuries, the theory is as the economy improves the Federal Reserve, to fight inflation, will pull money out of the economy by not extending their purchases of new securities. This will not be as easy with the purchase of mortgage backed securities which have an average life of twelve years. An improving economy will result in interest rates rising and thus the value of mortgage backed securities decreasing. If they pull money out of the economy to hold inflation in check the Federal Reserve will incur significant losses that will need to be covered by the tax payer. Don't blame the Federal Reserve for this needless loss. Blame the Republicans in Congress for not shouldering their responsibility to stimulate the economy by making sound investments in i

Libya Free Speech and Romney

Yesterday on the NPR/WBUR talk show "On Point" Christopher Dickey , Paris Bureau Chief and Middle East Regional Editor for Newsweek/Daily Beast, made a comment worth sharing. The Supreme Court ruled that shouting fire in a crowded theater is not permitted under the first amendment. With the creation of the internet and You Tube the world has become the theater. We in this country have had free speech since the founding of our nation. Therefore, when some crazy guy says some crazy things we tend to yawn and go on with our lives. This is not true in the Mideast. They are just now being introduced to the freedoms we have had forever. We need to be sensitive to this even as Mitt Romney tries to gain political advantage of this tragedy. I guess I should recognize that crazy people will say crazy things. Hopefully most voters will recognize Romney's lack of sensitivity to the situation and put him in a position where he can freely go on vacation again with his dog strap

Romney The Flipper

When Romney was in Detroit this year campaigning he said of the Chinese, "They are good competitors, and like all good competitors, will take every advantage they can get." Does that mean he thinks our banks are good competitors also? Romney said we don't need to see his tax returns for five years and we should trust him. Romney first said he would repeal Obamacare on the first day he is office. He now says he will keep the good parts of the healthcare bill.  Romney and Ryan said they have a plan that will allow them to increase military spending while reducing taxes on the middle class and not increase taxes on the wealthy. When asked to explain it they said they will after the election. Paul Ryan first said he was against abortion in cases of rape and incest. He now says he can go along with it because Romney does. Paul Ryan first said he ran a marathon under three hours. He now admits it was over four hours. More to follow; I am sure. Add your favorite Mitty

Romney: Show me The Taxes

Update: September 21, 2011 Today Mitt Romney released his 2011 tax returns and a letter from his accountants summarizing his taxes back to 1990. I have two comments related to this, Mr. Romney did not take the full deduction that he was entitled to for his charitable deductions in 2010. If he did, his effective tax rate would have been under 10% instead of near 13%. Further, he can in the future file an amended return and get a further refund from the IRS. The summary of his income taxes going back to 1990 is no substitute for disclosing the returns. Remember, it his his accountants that prepared the summary and secondly all the details of these returns were not released. This is no way to build trust.  _________________________________________________ It is appalling that we are less than 60 days from a presidential election and we only have seen one year of Romney's tax returns and the country is OK with that. Do we take our politics seriously. If a young person

Obama Deserves to Win

The Democratic convention  gave me cause to think about two phrases that Albert Eisenstein was fond of. One of them was what he said and the other hung on his wall at Princeton. "Not everything that counts can be counted, and not everything that can be counted counts." (Sign hanging in Einstein's office at Princeton) "Imagination is more important than knowledge." The above quotes sum up my feelings why I will be voting for Obama. Obama is like Steve jobs; they both possess the conceptual skills needed to lead. While Steve Jobs was turning Apple into a success story, there were thousands of people who knew the workings of computer technology better than he did; however, no one better understood what the consumer (citizen) needed then Steve Jobs.

Romney's Five Point Plan

What is Romney's plan, exactly? He broke it down for Fortune into five categories: 1  Below each category is my response   in blue. (1) Aggressively promote domestic energy development, especially fossil fuels.  How can anyone disagree   with developing domestic energy sources? The question is at what cost in terms of the environment and future generations .  Our concern should be which presidential candidate will implement the best energy policy for us and future generations. The President has a duty to think beyond tomorrow. World-wide demand for energy will increase dramatically as more countries develop a middle class.  The BRIC countries, Brazil, Russia, India and China are well on their way to becoming good economic competitors. In 2005 the U.S. consumed 16 times as much energy per capita as did India. They have a population that is roughly 4 times ours. As India becomes more prosperous their consumption rates will get closer to ours. Over the same time peri

Europe Unite!

Europe needs to form a more perfect political union. A fiscal plan will only work if there is a political plan. It is time to find out if it is possible to unite parts of Europe under one political body. The only way to do this is to have the citizens of each country vote on whether they want to join such a union. The individual nations of Europe are too small to compete against countries such as China and the United States. The future tells us that the remaining BRIC nations, Brazil, Russia and India, will soon be competitors that will dwarf the present European nations.

Obama And Democratic Convention

Here is what Barack Obama and the Democrats need to do at next weeks convention. They need to explain the contrast between the Democratic parties platform and the platform revealed by the Republicans last week. While doing this, major falsehoods expressed by Republicans must be addressed. Obama must debunk the fallacy that the country is worse off than it was four years ago. The events causing the collapse of housing and stock markets did not happen in the fall of 2008. The fall of 2008 was when the market, and thus the country, acknowledged the devastation of home values brought about by sub-prime lending throughout the first eight years of this century. It is like you opened a $50,000 savings account in the year 2000 and someone went online in 2004 and stole it; however, you did not discover it until 2008. When were you actually out the $50,000; in 2004 or 2008? In the normal course of banking and finance, holders of financial assets are required to establish a reserve for losse